STATE FOR EAP/MTS, EAP/EP, AND EEB/TPP/IPE
STATE PASS USTR FOR BWEISEL, RBAE AND KEHLERS
STATE ALSO PASS USAID, OPIC
TREASURY FOR OASIA
USDOC FOR 4430/ITA/MAC
USDOC PASS USPTO FOR KSUKHAPINDA
BANGKOK FOR JENNIFER NESS

2. (SBU) Summary: The Philippine government is currently drafting
implementing rules and regulations for the Cheaper Medicines Act.
Both the Philippines' Intellectual Property Office and Health
Department have conducted initial public hearings to solicit
comments. Local and multinational stakeholders have participated in
public hearings, and the Health Department will compile and release
the final implementing rules by November 4, 2008. USTR is currently
reviewing the texts. USG comments are needed ASAP. End summary.

Background
----------

3. (U) The Philippine Congress passed the Cheaper Medicines Act (ref
A) on June 6, 2008, and the final implementing rules and regulations
are scheduled for release on November 4, 2008. The Intellectual
Property Office (IPO), the Department of Trade and Industry (DTI)
and the Bureau of Food & Drugs, will issue the implementing rules
for the amendments of the Intellectual Property Code (Republic Act
9504). The Health Department (DOH) will promulgate all other
implementing rules, including those implementing amendments to the
Generics Act (Republic Act 6675) and Pharmacy Law (Republic Act
5921).

4. (U) After reviewing the position papers and comments submitted by
stakeholders during and following the first public consultation, IPO
released to the public on September 25, the draft language of the
implementing rules for the provisions of RA 9502 that pertain to
amendments of the IP Code.

5. (U) EconOffs attended the first public hearing on the
implementing rules, chaired by IPO Director General Adrian S.
Cristobal, Jr. Participants included representatives from the
Philippine government, civil society organizations, law firms, local
pharmaceutical companies, the Pharmaceutical and Healthcare
Association of the Philippines (PHAP), academia, and other
stakeholders. IPO elicited comments on the different sections of
the amended provisions of the IP code. Most of the comments, which
IPO posted on its website, concerned the provisions granting
compulsory licenses, and the use of inventions by the government.

Implementing Rules from the Department of Health
--------------------------------------------- --

6. (SBU) DOH Undersecretary Alexander Padilla spearheaded the public
consultations for the Health Department. After conducting a public
hearing early in October, the Department released draft rules
covering the sections of the Cheaper Medicines Act that amended the
Generics Act and the Pharmacy Act on October 21. Post transmitted
the draft rules to USTR by e-mail the same day. In a digital video
conference with IPO and Philippine Department of Health
representatives on October 3, USTR committed itself to providing
written comments on the draft regulations.

Private Sector Engagement
-------------------------

7. (SBU) Philippine government and local pharmaceutical companies
have commented to econoffs on multiple occasions that local and
foreign pharmaceutical companies have been attending the public
consultations. However, foreign pharmaceutical firms have not been
actively participating and have yet to submit their positions on the
draft implementing rules to the appropriate agencies. Their
passivity has created the impression that they are just watching
from the sidelines and want to avoid participating in the open
public consultation process. One embassy interlocutor opined that
PHAP and the American pharmaceutical companies are being low-key in
seeking support for their positions because of their experiences
during the plenary deliberations of the Medicine Bill in the
previous Congress (reftel B).

8. (SBU) Comment: We are concerned about this process. With
international pharmaceutical companies less than fully engaged,

MANILA 00002418 002 OF 002

there is some danger that important US interests could be
neglected.

9. (SBU) Action Request: It is crucial that we receive USTR
comments in time for them to have an impact on the final
regulations. Please provide them ASAP.

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